Is it time for you to prepare your dreaded tax return? It's amazing how quickly tax season comes around and for many people, it makes them realise how relaxed they have been throughout the year in terms of keeping records and maximising opportunities to pay less in taxes. If this is your mindset right now, what can you do to ensure that next year's tax return will be a lot less painful?
Keeping up with the details
Many people consider accounting issues to be a chore, and they put it off as long as they can. In fact, they may put off certain tasks until the last minute and then find that they have to try and recreate their financial affairs for up to 12 months previously. There is no excuse for that anymore as there are many different apps on the market that enable you to use your smart phone to capture receipt details electronically with one tap. Smart software can also help you to categorise all of this information at the time it is incurred, so you don't have to try and figure out the details later.
Apportioning use
Did you know that, if you use certain services or goods both for work and personal use, you can still claim at least part of it against your taxes? You need to be sure of your ground first, but if an adviser has told you that you can, don't forget to include it.
Charitable giving
Most people feel better when they donate something to charity, and you can also claim the amount that you donate against your tax return. Once you've made a donation, make sure that you get a receipt and then enter the total into the appropriate section on the tax return. Remember, you do not get the full value of the donation, but rather, it is applied to your taxable income before your percentage is calculated.
Health insurance
This one is a bit more complicated, but have a good look at your health-insurance situation. If you don't have private coverage and your income exceeds a certain threshold, you may be forced to pay a levy by the government over and above the standard addition. Consider instead whether it would be cheaper for you to take out private health coverage, and see how that will affect your tax return.
As you can see, there are a few areas where you really need to get financial advice before making a decision, so get in touch with an accountant to help you work it all out.
